Negotiations With Viacom
/“Viacom demanded a rate increase that’s 40 times the rate of inflation”
Frankfort Plant Board Cable-Telecom is in negotiations with Viacom, owner of MTV Networks, to continue offering Viacom’s channels, but believes the current proposal from Viacom would have costly repercussions for the local company’s customers.
While FPB is restricted from talking about specific rates, Viacom demanded a rate increase that’s 40 times the rate of inflation*. Imagine pulling up to the gas pump and finding that gas has gone from $3.50 a gallon to $6.00 – overnight. That’s the scale of some of these large increases. In addition, Viacom may demand we drop their networks if we don’t agree to their proposal.
FPB is a municipal utility in Frankfort, offering cable programming, phone and broadband services throughout Frankfort & Franklin County while employing more than 200 people.
Cable Superintendent John Higginbotham said “ we have created a new web site, TVOnMySide.com to educate our customers on rising programming costs. Across the country, networks are substantially increasing their fees to cable companies, which affect customers directly”
“Viacom owns popular networks such as MTV, Nickelodeon and Comedy Central. But in order to offer these, the cable networks require us to carry networks that are not as well-known, networks such as MTV2, MTV Hits and VH1 Classic. And network fees account for the bulk of monthly cable bills.” explained Higginbotham.
Today's entertainment marketplace is changing rapidly, and there has been considerable consolidation among major media companies. These mergers allow large programming companies significant leverage over independent cable companies such as FPB.
Higginbotham added “Our goal is to protect our customers from significant programming fee increases. We pay programmers such as Viacom a fee per channel per month per customer for their programming. When these contracts conclude, we negotiate new agreements and that concludes that business deal. But when a multibillion dollar company such as Viacom demands an unprecedented increase in its monthly fees, we believe it’s our responsibility to take a stand” Higginbotham concluded “These large increases impact all of us throughout Frankfort and we want to make sure our customers know we are working on their behalf.”
FPB urges customers to get the facts and stay informed by visiting TVOnMySide.com.
* Source: 12-month period from January 2013 to January 2014, Bureau of Labor Statistics, released February 20, 2014.